US: Veterinary revenues on the rise despite fewer visits

An analysis by American market research firm Bloomberg Intelligence shows that the growth of the pet diagnostic sector and increased testing have boosted revenue for veterinary practices.

According to the Global Pet Economy 2024 report, there were about 335 million veterinary visits in 2023. Non-wellness visits (for sickness, therapeutic procedures and monitoring) have remained mostly flat since 2022.

While wellness visits for routine checkups and vaccinations declined by 1% from 2022 levels, diagnostics use has been growing steadily, with “mid-to-high single-digit” increases annually since the pandemic.

During the pandemic, veterinary visits spiked as pet ownership soared. However, visits dropped off as people returned to work and the rate of new pet adoptions slowed in 2023.

With fewer new pets entering households, this trend is expected to persist for the remainder of 2024, though growth may resume next year as pet ownership stabilizes.

Increased revenue

Despite the decline in visits, clinics have been able to increase their income. Data from American pet care company IDEXX suggests that approximately 8,500 clinics showed a 3.2% increase in revenue per clinic in the first quarter of 2024.

A key factor has been the higher use of diagnostic tests, which was boosted by curbside drop-off during the pandemic. This limited vets’ ability to discuss pet issues with owners, permanently increasing the routine use of fecal and blood tests and boosting sales per practice.

Diagnostics use rose 9% last year and remains 4% above pre-pandemic levels. This trend is expected to continue and reach $35 billion (€31.4B) by 2030 from $25 billion (€22.4B) this year.

Staff shortages on the rise

Staffing shortages have also been a notable challenge for veterinary practices. While IDEXX flagged labor issues as a concern, recent data from the U.S. Bureau of Labor Statistics suggest the situation may be improving.

Veterinary employment was at 461,100 workers at the end of the first quarter of 2024, slightly below pre-pandemic growth rates.

Employment had previously peaked at 469,300 in the fourth quarter of 2023. The American Veterinary Medical Association (AVMA) reported a 2% increase in veterinary positions last year, indicating continued expansion in the industry’s workforce.

Practices have increasingly relied on veterinary technicians and non-licensed staff to alleviate labor pressures.